Last Updated on May 24, 2022
Student loans are an investment. You’re investing in your future, and there’s no better way to do that than by getting a great education. But when you’re paying back those loans after college is over, it can seem like the opposite of an investment: money spent on something that doesn’t bring any tangible return.
But it’s not true! Your education will reward you with a higher-paying job and a better quality of life—and the student loan repayment process is just the beginning of the benefits you’ll reap from what you paid for in school.
So how much interest does your student loan incur? Well, that depends on where you went to school, and what type of loan you took out. Here are some general guidelines for what to expect:
How Much Interest Do Student Loans Have
If you have begun repayment of your federal student loans, their interest rates have been set to 0% until after Aug. 31, 2022, and no payment is due before then.
If you are still borrowing for your education, the federal student loan interest rate for undergraduates is 3.73% for the 2021-22 school year. Federal rates for unsubsidized graduate student loans and parent loans are higher — 5.28% and 6.28%, respectively. The rates for the coming year go into effect on July 1.
Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit. If you have good credit, you may be able to refinance existing student loans to get a lower rate.
Depending on the kind of student loan you have or are looking to get, interest rates vary. About 90 percent of student loan debt is comprised of federal loans, with interest rates ranging from 3.73 percent to 6.28 percent. Average private student loan interest rates, on the other hand, can range from 2.99 percent to 12.99 percent fixed and 0.94 percent to 11.98 percent variable. While federal student loan rates are the same for every borrower, private student loan rates vary widely based on the lender, the type of interest rate (fixed or variable) and the borrower’s credit score.
Federal student loan interest rates
|LOAN TYPE||BORROWER||FIXED INTEREST RATE||LOAN FEE|
|Direct Subsidized Loans and Direct Unsubsidized Loans||Undergraduate students||3.73%||1.057% for loans first disbursed on or after Oct. 1, 2020, and before Oct. 1, 2022|
|Direct Unsubsidized Loans||Graduate or professional students||5.28%||1.057% for loans first disbursed on or after Oct. 1, 2020, and before Oct. 1, 2022|
|Direct PLUS Loans||Parents and graduate or professional students||6.28%||4.228% for loans first disbursed on or after Oct. 1, 2020, and before Oct. 1, 2022|
Source: The U.S. Department of Education
Private student loan rates (graduate and undergraduate)
|LENDER||FIXED APR*||VARIABLE APR*|
|College Ave||3.49% to 12.99%||1.19% to 11.98%|
|Earnest||3.24% to 12.78%||0.94% to 11.44%|
|LendKey||3.99% to 7.88%||1.66% to 7.88%|
|SoFi||3.47% to 11.16%||1.89% to 11.92%|
Refinance student loan interest rates
|LENDER||FIXED APR*||VARIABLE APR*|
|College Ave||3.49% to 6.74%||3.44% to 6.64%|
|CommonBond||4.49% to 7.74%||4.44% to 8.09% variable; 4.48% to 7.62% hybrid|
|Earnest||2.74% to 7.99%||1.74% to 7.99%|
|LendKey||2.69% to 7.93%||2.14% to 5.25%|
|SoFi||3.49% to 7.99%||1.74% to 7.99%|
*Includes autopay discount. Interest rates as of March 24, 2022.
student loan calculator
Using a student loan calculator can help you create a student loan repayment strategy that’s right for you. With some basic information about your existing or prospective student loan, the Bankrate student loan calculator shows you the monthly loan payment you can expect, how long it’ll take you to repay your entire loan and how much interest you’ll pay overall. Enter the details of your student loan into the calculator below to see your personal results.
Loan term in years
Loan term in months
Interest rate per year
Total Principal Paid
Total Interest Paid
COMPARE LOAN RATES
Show amortization schedule
ADD EXTRA PAYMENTS
What you need to know for this calculator
Before using the student loan calculator above, come prepared with a few pieces of information about your loan.
Loan amounts vary depending on whether you’re exploring a federal or private student loan. The loan amount you’re offered might also be limited based on your enrollment level (e.g., undergraduate versus graduate or professional student) or degree program.
Federal student loan amounts
- Direct Subsidized Loans: Up to $5,500 annually.
- Direct Unsubsidized Loans: Up to $12,500 annually.
- Direct Unsubsidized Loans: Up to $20,500 annually.
- Direct PLUS Loans: Up to the school’s reported cost of attendance, minus other financial aid received.
Parents of dependent undergraduate students:
- Parent PLUS loans: Up to the school’s reported cost of attendance, minus other financial aid received.
Private student loan amounts
Loan amounts for private student loans can vary by lender. Each lender sets its own borrowing criteria, annual borrowing limits, interest rates and repayment terms. In general, private student loan lenders offer loan amounts that cover the gap between a school’s cost of attendance and any other financial aid a student receives. Some lenders also impose lifetime borrowing limits, which may be up to $150,000 or more for some degrees. Regardless of whether you borrow federal or private student loans, borrow only the amount you need per school year after exhausting all grant and scholarship options. If you must take out loans to finance educational gaps, consider maximizing federal student loan limits before turning to a private student loan, as federal student loans come with additional benefits like income-driven repayment plans and standardized hardship programs.
Your loan term is the amount of time you have to repay the loan in full. For federal student loans under a standard repayment plan, the default loan term is 10 years. However, student loans that are under an alternative payment plan offer terms from 10 to 25 years. Like private student loan amounts, private student loan repayment terms vary by lender. Terms for private student loans can be as short as five years and as long as 20 years. A shorter loan term can help you save more money on interest charges during your repayment period but result in a larger monthly payment. Some lenders offer lower interest rates as an incentive for a short term length. On the flip side, a longer term for your student loans will lower your monthly payment but will accumulate more interest charges over time. Before borrowing student loans, make sure you know all of the term options your lender offers so you can choose the right path for your financial needs.
The interest rate you’re offered depends on the type of lender you’re pursuing and your financial picture. Federal student loans offer the same interest rate to all borrowers, regardless of credit score or income. Private student loans, on the other hand, will often do a credit check and set interest rates according to your creditworthiness. The higher your credit score, the lower your interest rates. Keep in mind that the lowest interest rates advertised on lender websites may not be available to you. To find out what interest rates you’ll receive, take advantage of lenders’ prequalification features, if available. Prequalification allows you to input basic details about yourself and your desired loan in exchange for a snapshot of the rates and terms offered.